How to claim outstanding debts in the Local Court

Have you entered into a loan agreement that is not being fulfilled? Do you have invoices that remain unpaid by your clients? Have you paid for services you haven’t received? Do you own property that has not been returned? If you’ve answered yes to any of the above, you may wish to commence proceedings to recover your money in the Local Court of NSW.

Commencing proceedings can be daunting, so it is helpful to understand what sort of matters you can commence in the Local Court, and what you can expect will occur in the proceedings.

What types of matters are commenced in the Local Court?

The Local Court deals with civil disputes for claims up to $100,000. The Local Court has two divisions to determine civil cases: the Small Claims Division hears claims up to $10,000 and the General Division hears claims over $10,000 and up to $100,000.

What is the Small Claims Division?

Parties in Small Claims Division proceedings can choose to represent themselves, however it is still a good idea to seek initial legal advice from a solicitor if you decide to represent yourself. A solicitor with experience in dispute resolution and litigation can provide you with advice about the strength of your originating claim or defence and the evidence you will need to provide to the Court. A solicitor can also attempt to settle the matter without commencing proceedings, such as drafting a Letter of Demand instead.

What to expect in Small Claims Division proceedings

The only Court attendances required during proceedings are the pre-trial review and the actual trial or hearing of the matter.

The pre-trial review aims to explore settlement options, and if settlement cannot be reached, the parties will need to consider any part of the claim that is unclear and needs to be further specified; any request or exchange of documents; and any agreed facts and issues in dispute.

The Assessor will determine if the parties are ready for the matter to proceed to trial.

At the end of the trial, the Assessor will deliver their oral judgment, which will be binding on the parties.

A party can appeal a decision of the Small Claims Division in certain circumstances. If you are considering appealing a decision made in the Small Claims Division, you should seek professional legal advice on how to proceed.

What to expect in General Division proceedings

Proceedings in the General Division are more formal, and in a typical case, witnesses attend and give evidence, including experts, and a magistrate will determine the outcome of the case.

There will be an initial “call-over”, where the court will make directions to assist the parties to determine the salient issues and also the date for the second call-over, where the review date and trial date are set down. The review date takes place one month prior to the trial, and the court will enquire as to whether directions have been complied with by the parties, and determine whether proceedings are ready to proceed to trial.

What costs can I expect to recover?

Costs orders in the Small Claims Division are made under rule 2.9 of the Local Court Rules.

In the General Division, if the plaintiff is successful and the claim is for an amount between $10,000 and $20,000, then the maximum costs that can be awarded to the plaintiff is 25 per cent of the amount awarded by the court, plus any amount that might be allowed that relates to costs incurred up to the filing of the first defence in the proceedings.

A word of caution on commencing proceedings: Commencing or defending any Court proceedings requires careful consideration. You should consider obtaining advice in respect of the strength of your claim or defence and any evidence that you may require. Representing yourself in Court can be intimidating and overwhelming and engaging an experienced lawyer is likely to increase your prospects of a successful, commercially favourable outcome.

Streeterlaw solicitors with expertise in Local Court proceedings can assist you in your personal or business claim. Please contact our friendly team on 8197 0105 or email advice@streeterlaw.com.au.

Written by Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!